Professional Documents
Culture Documents
Summary 02
Acknowledgments
As a Task Force established nearly two years ago, we quickly concluded that there was no shortage of good advice or
examples of best practice on Corporate Social Responsibility. There was therefore no need to re-invent or duplicate. On
the other hand we found the subject area very fragmented and not always easy to access, and so there was a real job to be
done in providing a comprehensive guide through the considerable labyrinth of available information. We have “stolen
shamelessly” from many authoritative sources and are very grateful for all the help and encouragement we have received.
Our output is this document which will hopefully be helpful to those organisations large or small wishing to get started
or to those who want to build greater expertise. But even more valuable we believe is our website, www.business-impact.org,
which is an Aladdin’s cave of treasure on the subject bringing together very many excellent case studies and reference
material from a wide variety of sources. It would not have been possible to present all this information in hard copy
while preserving such ease of access. We are encouraged that our website is growing in popularity having already had over
1 million “hits”.
I have been very fortunate to lead a Task Force of energetic, talented and experienced individuals determined to produce a
practical guide on a subject of considerable and growing importance. We ourselves needed little encouragement at the outset
but we all felt even more passionate about Corporate Social Responsibility when we concluded.
We hope our work will ignite enthusiasm and commitment and the widespread adoption of best practice including
measurement, reporting and sharing.
My warmest thanks to all the team including Stephen Serpell, Alison Garner, Peter Davies and Mallen Baker, and
all those who produced the texts and created and maintained the website.
Summary 03
Winning with integrity What’s the benefit?
What’s it all about? Does it matter to you if:
Your company has a poor reputation for honesty
How is doing good in fact good for your business? and trustworthiness?
How can companies benefit from being more socially Your customers have a bad opinion of your impact
responsible? Is it really possible to combine this with on the environment?
business efficiency and competitiveness? Future employees don’t have the skills you need?
It’s difficult to attract and retain good people?
Social responsibility can help your business to succeed The marketplace in which you sell isn’t prospering?
in three ways. It can help: Your organisation is unattractive to business partners?
Build business sales The negative views of local authorities are making
Build the workforce planning business expansion difficult?
Build trust in the company as a whole Ethical investment funds choose not to hold
your shares?
This report covers seven areas of social responsibilities
that you can consider. Each volume explains how the area Companies can’t afford to ignore these questions.
can affect business results and gives practical advice on They are central to success. Socially responsible businesses
how to tackle the subject – and how to measure how well have additional tools at their disposal which help them
you are doing. score more highly on all these fronts.
Social responsibility is about sustaining positive
relations not just with customers but all round – not just
The seven areas are:
pleasing some people while allowing others to become
Purpose & Values
alienated. This means being alert to ways of improving
Workforce
your company’s impact on society and the environment.
Marketplace
A balanced approach to this will improve, not impede
Environment
popularity.
Community
Human Rights
Guiding Principles There are considerable benefits to be obtained
from getting it right. In a recent Financial Times/
PricewaterhouseCoopers “Most Respected Companies
These are areas where your organisation can get an
Survey”, 750 chief executives across Europe were asked
extra business edge if you do things right – or lose out,
their views on the most important business challenges
if you do things wrong.
for companies in 2000. Of those challenges listed,
Not all of the areas will be applicable to all companies –
increasing pressure for social responsibility was ranked
for example, human rights might be less important for
second only to the recruitment of skilled staff.
a smaller UK service company than for a large multi-
Social responsibility is not just for large companies.
national. However, it’s important to recognise that a
In early 2000, DTI, BT and KPMG commissioned MORI
company’s standing can be underlined – or undermined –
to conduct interviews with the managing directors of 200
by what it does in any of these seven areas.
UK small and medium companies:
Summary 04
1 The Sunday Times,
7 May 2000.
The three ways social responsibility The Government’s “Best Practice” programme has
can help your business to succeed found that businesses, both large and small, can cut
expenditure on energy and waste by up to 10 per cent
a year with little or no cost to the company.
1. Building business
Consumers want products and services that are fit for
purpose and good value. But they do not want companies Of course socially responsible behaviour can also relate
to behave irresponsibly. to fundamental issues of risk management, including legal
In May 1999 the Millennium Poll on Corporate Social compliance. No company can afford to be found wanting
Responsibility interviewed over 25,000 citizens across 23 in its legal obligations on health and safety, human rights,
countries on 6 continents revealing that: or on race, gender, or disability discrimination.
These issues are not just affecting companies that sell
to the public. Many large companies are now building
Half the populations in countries surveyed are paying
socially responsible performance into the criteria they
attention to the social behaviour of companies
use for selecting suppliers.
All around the world, impressions of individual
Some big companies now expect suppliers and sub-
companies are more shaped by corporate citizenship
contractors to perform to their own high standards
(56%) than either brand quality/reputation (40%) or
–particularly in the area of environmental performance
business fundamentals (34%)
and on the issue of human rights such as the use of child
labour. Because of the potential damage to the reputations
In the United Kingdom, polls show there is a very high
of large companies that get it wrong, this trend is likely
correlation between companies being publicly perceived as
to become ever more widespread.
socially responsible and being viewed favourably overall.
This interest in social responsibility also now has an
effect on consumer purchasing, with good companies 2. Building people
being rewarded and poor companies being penalised. Companies need to attract the best people to come and
For example, MORI research in 1998 among British work for them – and they need to retain them once they
adults found that: have joined.
A study conducted by McKinsey, “The War for Talent”,
published in 1998 found that only 3% of companies
17% had boycotted a company’s product on
responding believed they had enough talent reach their
ethical grounds
objectives in five years.
19% had chosen a product/service because
Social responsibility matters here since people want
of a company’s ethical reputation
to work for responsible businesses. MORI research
28% had done both
throughout the 1990s consistently found that the vast
majority of people believed that a company that supports
Another MORI poll conducted in 1999 showed that
society and the community is a good company to work for.
86% of adults consider the environment to be a very or
extremely important part of corporate responsibility.
“Between a quarter and a half of graduates say they will
As a result, companies are also finding that linking up
not consider working for companies that they believe to be
with charitable organisations can also provide a competitive
unethical – such as tobacco and defence firms and some
advantage. Not only can it build a good reputation, products
FMCG (fast-moving consumer goods) companies they
can be directly linked with charitable causes through
perceive as exploiting cheap labour abroad.”1 Andy Pasley,
cause–related marketing, which has been successfully
head of research and planning at Bernard Hodes, a
used by small as well as large companies to achieve greatly
recruitment consultancy
increased sales.
In 1998 MORI found cause–related marketing is
having a major impact on consumer purchasing with The benefits are not just restricted to recruitment.
nearly a third of the public (30%) having bought a product Social responsibility is helping companies retain, develop
or service because of a link to a charitable organisation. and enhance the performance of employees.
Social responsibility is also figuring more and more Many companies have found a direct correlation
as a factor in investment. One aspect of this is the healthy between the improvement of the company’s environmental
ethical investment sector where there are now a number performance and policies and its business results and
of ratings agencies at work, assessing the social and staff retention.
environmental performance of companies. The growing
importance of all this is shown in the emergence of the Not only is good staff retention important in itself,
Dow Jones Group Sustainability Index and the interest the work of management consultants Bain & Co found
in the use of this or equivalent indexes in Europe. that those companies that have the highest employee
While increased competitiveness is one benefit, retention also have the greatest customer retention.
companies can also make substantial cost savings from And those with the best customer retention also have
socially responsible ways of working. the highest profitability.
Summary 05
The FI Group, the information technology services Employees that yours is a good company to work for
company, encourages and supports its employees to Customers and suppliers that yours’ is a reputable
get involved in the community through volunteering. organisation to do business with
Investors and financiers that yours is a company
In 1997 FI commissioned an independent survey worth backing
on employee attitudes. Of the 21% of employees that The community that yours is a company that cares
had been involved: about and responds to local issues
74% had an improved perception of the company How do you get business benefit?
58% believed they had developed personally Being socially responsible only gives business benefits
35% believed they had developed professionally if you do it effectively. It does not mean wasting resource
or making bad investments just for the sake of political
3. Building trust correctness. It does mean identifying the actions that will
'Licence to operate' is a term that describes the support have most impact on your particular company, managing
a company needs to conduct its business successfully. For them in a professional way – and communicating what
some companies, Government or regulatory bodies literally you are doing.
grant this licence. But licence to operate also covers issues Without communication, no-one will be aware of
that impact all businesses on matters such as getting your work. Without awareness, there’s no benefit to your
planning permission to expand or change operations. business standing or reputation.
For the majority of businesses, a licence to operate is No business, large or small, is divorced from society.
an unwritten treaty between the company, its employees, The success and failure of each is dependent upon the
customers and the broader community. other. People are genuinely interested in how your company
Central to this notion of licence to operate is the notion is involved. However, they’re suspicious of empty words.
of trust. Trust is an increasingly important element in You need to demonstrate that your involvement is real
influencing the way in which employees, customers, and produces real results.
suppliers and the broader public judge a company. The other chapters in this report suggest a number
As such, creating a licence to operate, building trust of practical ways of measuring and reporting social
and credibility, is central to what leading-edge companies responsibility; but they all share some common principles,
are doing. It is about creating trust among: and a similar approach to action.
Summary 06
How do you put it into action?
Managing corporate social responsibility is just like managing any other aspect of the business. Whether a company
employs 50 people or is a multinational conglomerate, there are a number of key principles that apply. These all turn on
ensuring you have the right policies, the right processes, and that you get the right performance.
Common Principles
There is a set of simple steps for turning all this into action.
1. Secure commitment 4
8 5
2. Identify external concerns
and relate to business
interests
4. Define strategy, plans 5. Put into practice 6. Measure 7. Report and 8. Dialogue with external
and targets, and performance communicate parties to review
allocate resources progress
Getting Started
1. Secure commitment – to make any progress at all it’s necessary for senior management to make a commitment
and to allocate resources
2. Identify external concerns – the topics covered in this report may provide an initial guide. The aim is to ensure
you address the issues that are most relevant for your own company
3. Review current policies, processes and performance – for what areas do you have policies and where are the gaps?
What performance measures, if any, do you have in place?
Once past this initial phase, the process should involve continuous improvement – so it becomes a loop.
The remaining steps are as for any management process:
Getting Results
4. Define strategy, plans and targets – and allocate resource – create the plans and provide the means to turn ideas
into reality. These must align with both business interest and stakeholder concerns
5. Put into practice – the implementation
6. Measure performance – actions are of little value without measures and an interest in continuous improvement
7. Report and communicate – effective communication is essential for success. Make sure people know about what
you have done and can understand and assess your strategies, actions and impacts; and
8. Interact with external parties – some form of external consultation is essential to any meaningful review progress
Summary 07
A part, not apart In general, the progression through these levels entails
It is important to remember that managing socially a shift
responsible activity means working with others rather
than in isolation: From simple first steps to demanding, leadership
activities
Consulting with external bodies in order to From the elimination of negative impacts to delivery
understand their concerns (for example, talking to of positive ones
local authorities, employees and customers about From in-company efforts to influencing your
what is important to them) business partners
Measuring their assessment of business performance From an internal focus to an external one
in priority areas From simple indicators to perception measures
Involving them in action planning From informal self-assessments to formal standards,
Communicating business performance to them external evaluations, benchmarked comparisons
Developing the company’s priorities as their views and awards
and concerns change
The levels of performance measurement could also be
Recognising your starting level seen successive repeats of the Management Model set out
The ideal is to embed social responsibility into the in the previous section. First time around, a company
way your company conducts its business. But it cannot should be aiming for Level 1 indicators. By the time it’s
be done all at once on every front. going around the loop for the third time, it should be up
The other chapters in this book, therefore, set out to Level 3 indicators.
recommended actions for seven different areas of social
responsibility. They use a graded approach based on three Specific impact performance
possible levels of involvement. These range from Level 1 indicators and benchmarks
for first time adopters through to Level 3 for those who
wish to set new standards as leaders. Policy and processes
Every company needs to decide for itself which
For each subject, the steps are few and simple for are the most important social issues for it to address.
companies who are first time adopters or who aim to Most businesses give greatest weight to workforce and
achieve the basic level of social responsibility (Level 1). marketplace issues. Some will need to give priority to
Companies wishing to move on to a more sophisticated environment, or community or human rights issues.
approach will want to consider Level 2 actions. The separate chapters suggest steps for addressing each
Businesses who are very much in the public eye or who subject area.
aim to be leaders in this subject should adopt the stronger
– but much more demanding – actions at Level 3. The following table summarises the key policy and
process actions recommended for each impact area, also
showing how they map out against the “three level”
approach. These recommendations provide a detailed
interpretation for each area of the general processes for
action shown in Management Model earlier.
Summary 09
Summary of policy & processes
Summary 14
What does the future hold? 2. Measuring results: a self-assessment tool
The Business Impact Task Force found convincing To be effective, companies need to measure and
evidence that companies can enhance their communicate what they do. This report has recommended
competitiveness by measuring and managing their impact pragmatic measures that companies can use across a whole
on society. range of impact areas.
Business as a whole will also benefit by making the These measures have been summarised in the
principles behind the report more widespread. The Task Business Impact Self-Assessment Tool, which uses the
Force has set out to support this in six ways. report parameters to give a quick overview of where any
business
1. Support Resources – on paper and on-line, is in relation to its impact on society, using the same three
for companies of all sizes level approach.
Companies need practical support and resource The tool is available on-line at
material to turn all this into results. More detailed, www.business-impact.org/review/
pragmatic advice It can be used by companies at any stage of
is contained in the other chapters of this report. development, and requires only a short time to complete.
More information, including a “Starter Pack” full of
ideas, as well as a database of hundreds of case studies, can To encourage widespread use of this tool, Business
be found on the website at www.business-impact.org, plus in the Community will work with its member companies
the related core Business in the Community website and to encourage its adoption. The tool is recommended to
those of the partner organisations who made this output business, also to Government, business representatives,
possible – a list is provided at the end of this chapter. standards agencies and others, as a simple starting point
for assessing performance and identifying areas
This material is specifically intended to assist smaller for improvement.
and medium sized companies as well as very large ones.
This is an immensely important area. The Task Force’s own 3. Communication and recognition
survey into smaller and medium sized companies showed To give further recognition to those who commit
not only that up to 50% of them are involved in some themselves to social responsibility and to encourage
form of citizenship but also that their overall contribution public commitment to action in this area, the Task Force
nationally might be as much as £3 billion a year – ten times encourages companies to sign a “statement of intent” –
more than the contribution of large enterprises. the signatories of which will be published in a special
listing on the world-wide web.
More still needs to be done Signatories can then also add hotlinks to key social
Specifically the Task Force recommends that: or environmental pages on their own websites. This is
one means of broadening communication of what they
Companies and other organisations should be do since the site is also a portal for anyone who wants
encouraged to provide and promote further case a list of responsible UK companies and to see what
studies of best practice. they have to say for themselves. This facility is at
Intermediary organisations, such as Business in the www.business-impact.org/intent/. It is searchable by
Community (BITC) and other public bodies should issue, as well as by company. There is also a link to a
aim to provide more material geared to the needs of similar, international listing.
smaller and medium sized enterprises. The disciplines At the launch of this report, some senior companies
of good citizenship are well documented for large will also be taking this commitment one stage further, in
corporations, but much of this material is irrelevant or undertaking to measure and report against the criteria
unsuitable for smaller and medium sized enterprises. proposed in the report and to provide this information to
There should be more collaboration between the various be published on a connected web portal which will be part
expert bodies who advise on this subject, to harmonise of the Business in the Community site. These companies
guidance on best practice and reduce the apparent will trial and test the conclusions of this report, and
complexity of the subject. The Task Force is itself feedback over the course of a two year period how effective
immensely indebted to the collaborative engagement they have proved to be.
of all the bodies who made this output possible.
Summary 15
4. Standards, kitemarks, and awards 5. A Social Responsibility Index
Awards schemes can provide powerful recognition for The Task Force also recognises the great power of
good performance; and so can the attainment of standards, published ratings, such as Business in the Community's
such as Investors in People or ISO9001, which can also Business in the Environment Index published annually
impart a valued “kitemark”. A number of standards and with the Financial Times, which has helped to improve the
other initiatives are referenced throughout the main body awareness of the need for environmental measurement.
of this report and in the Other Key Initiatives chapter – The Task Force believes that the measures and
they are recommended to companies for consideration. principles recommended in these texts should be used as
However, it is for each company to decide what awards or the basis for a new Index of corporate social responsibility.
standards to pursue since they do require significant effort. It encourages the main bodies which have supported the
Accordingly, this Report does not advocate the creation Business in the Environment Index in the past to support
of any new standard or award scheme beyond those which the development of a broad benchmarking approach.
already exist or are in preparation elsewhere.
However, the Task Force appeals to the owners of The corporate social responsibility Index is to be
existing standards, such as Investors in People and the developed by Business in the Community, using the
British Quality Foundation, to incorporate relevant experience gained by its business leadership teams in its
principles and measures from this report in their own previous work on benchmarking company performance
future thinking. on corporate social responsibility issues.
In this way, social responsibility can be incorporated
into the standards of general management, instead of 6. Tomorrow’s Managers
treating it as if it were somehow a separate subject. This report has covered a range of issues that are
becoming increasingly important for business. Correctly
To help take this forward, the annual Awards for managed, social responsibility can add to an enterprise’s
Excellence sponsored by BITC and the DTI will from success and provide an extra edge to business leadership.
2001 reflect the principles set out by the Task Force. Mismanaged, it can undermine a company’s standing and
In particular, the overall Impact on Society Award will place it at a real disadvantage.
look for excellence across the full range of responsibility The Task Force has consequently also aimed to provide
areas, processes and measures covered by this Report. the sort of practical guidance that provides a framework
for leadership as well as ideas that can be built into
As participants in the Task Force, the British Quality management training and codes of practice.
Foundation and European Foundation for Quality
Management are also considering this report’s Training and development materials for business people
definitions and measures of social responsibility as part and students are needed on these issues as part
of their review of the “Impact on Society” section of the of standard guidelines on good management
Business Excellence Model. Social impact should also become a core part of the
curriculum in all business schools and management
Business in the Community (BITC) is reviewing its programmes.
Community Mark concept, which has proved successful The Task Force encourages all organisations involved in
in Brighton, with a view to its extension both in scope such educational courses to begin to build the principles
and in geographical coverage. of this report into their programmes.
A database of courses which already cover these issues in
Europe can be accessed via
www.business-impact.org/courses/
The Task Force has also arranged for the very extensive
resources of resources of Ashridge Centre for Business
and Society to be made available online as an additional
source of information. This will take place during 2001,
and will be accessible via www.business-impact.org/data/,
as well as from the main Ashridge website.
Summary 16
7. Reporting Where do you go from here?
Finally, the Task Force believes that all companies could The seven areas of social responsibilities are covered in
benefit from considering how they can communicate their the chapters enclosed in this folder:
social impact. There is also an increasing case for larger
companies to provide some form of actual reporting. Purpose and values Community
Whilst the development of a full Social Responsibility Workforce Human rights
Index is taking place, the first question that can be asked Marketplace Guiding Principles
immediately is – do you or don’t you report on social impact? Environment
Such reporting can benefit from using the framework
provided here. However the key thing is to begin a An action plan to help you on your way can be found
discussion which extends outside the company, and to at each chapter, based on three levels of involvement.
provide information through whatever communications You can find further information on the websites
media are appropriate. listed or learn about related initiatives in the Other Key
Initiatives chapter.
Communications on social responsibility need to be The Business Impact Task Force hopes that you find
clear and convincing. An enormous amount of work has the contents of the chapters relevant and inspiring. No
been done on this by the Global Reporting Initiative matter what the size of your organisation or the level of
(GRI), which has especially engaged multinationals and your involvement with social responsibility to date, we also
continues to develop reporting principles. hope that you will have a fuller picture of how doing good is
good for both society and your business and consequently
For smaller and medium-sized organisations a web- will intensify your commitment. We wish you continued
based facility is under development which will permit a success in the future.
simple social report to be very easily created (and if desired
published) on-line. This should be available via Suggested Site-seeing
www.business-impact.org/reporting/ from January 2001. This report includes the key information you need to
get started on your own social responsibility programme.
The Task Force has aimed to draw together the most For more information, visit www.business-impact.org
practical guidance on how companies can take effective web or talk to Business in the Community (BITC). They
action on social issues, and how they can measure the will be able to refer you to a growing list of organisations
results. A further major piece of work by CSR Europe with experience in this area.
(formerly European Business Network for Social The Business Impact Task Force was initiated by
Cohesion/EBNSC) has analysed the current Business in the Community, with the chapters on specific
communication and reporting practices of 45 companies subjects being provided by:
operating across many countries.
CSR Europe’s Report “Communicating Corporate Social Ashridge Centre for Business and Society
Responsibility” developed with the support of the European www.ashridge.com
Commission – Directorate General for Employment and Business in the Community www.bitc.org.uk
Social Affairs, confirms that the Task Force’s the Centre for Tomorrow’s Company
recommendations closely reflect the most common www.tomorrowscompany.com
measures used by these companies. The conclusions of the The Institute of Social and Ethical AccountAbility
CSR Europe Report also share the same categorisation of www.AccountAbility.org.uk
subjects, and advocate the same basic principles and The Prince of Wales Business Leaders Forum
processes for measures, as the Task Force. www.pwblf.org
These complementary outputs provide a fresh
contribution to discussions on global benchmarking for The on-line facility for the company listings, and for
large companies, as well as a basis for further work to the simple reporting tool, were developed in collaboration
support the needs of smaller and medium-sized enterprises. with CSR Europe www.csreurope.org, with BT support.
The database of courses was developed jointly by CSR
Europe and The Copenhagen Centre.
Acknowledgments
The material for this chapter was provided by the
Business Impact Task Force, with additional significant
input from Ashridge Centre for Business and Society.
Andrew Wilson
andrew.wilson@ashridge.org.uk Summary 17
Business Impact Task Force
Business in the Community’s Business Impact Task Force, led by Bill Cockburn, Group Managing Director BT,
was set up two years ago when HRH The Prince of Wales challenged business to establish a framework to measure
and report its impact on society.
Taskforce Members
Chairman – Bill Cockburn CBE TD Mike Gallagher Peter Smith Alan Jones OBE
Group Managing Director, BT Manager European Quality Award Partner Group Managing Director
European Foundation for Quality PricewaterhouseCoopers Express TNT Post Group
Management
Keith Faulkner Stuart Etherington Ian Christie Sarah Anderson CBE Edward Roberts CBE
Director of Public Affairs Chief Executive Associate Director Chief Executive Chief Executive
Manpower PLC NCVO Local Futures Group Mayday Group Peterson Spring (UK) LTD
Business in the Community wishes to acknowledge the invaluable support provided by BT throughout this project
Editorial Panel
Chapter Authors
Business in the Community is a unique movement of companies across the UK committed to continually
improving their positive impact on society, with a core membership of 650 companies, including 75% of the
FTSE 100.
www.business-impact.org
www.bitc.org.uk
Registered Office: 137 Shepherdess Walk, London N1 7RQ. Tel: 0870 600 2482.
Registered Charity No: 297716.
Company Limited by Guarantee No: 1619253.
For queries about the report content and your company’s impact on society, please contact:
mallen.baker@bitc.org.uk
Printed on paper which meets international environmental standards. November 2000